Elon Musk slams SEC as ‘broken’ over ‘artificially’ created $150 million Twitter stock windfall
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Elon Musk, the billionaire entrepreneur and CEO of Tesla, has criticized the US Securities and Exchange Commission (SEC) over its lawsuit regarding his delayed disclosure of a significant stake in Twitter, now rebranded as X.
The lawsuit marks a culmination of the SEC’s scrutiny of Musk’s investment activities with the social media platform in 2022.
SEC claims
On Jan. 14, Musk failed to meet the legal requirement to disclose his acquisition of more than 5% of Twitter’s shares within the mandated 10-day period.
The financial regulator pointed out that Musk surpassed the 5% threshold by March 14, 2022, but he delayed filing his disclosure until April 4—11 days past the deadline.
According to the filing:
“Because Musk failed to timely disclose his beneficial ownership, he was able to make these purchases from the unsuspecting public at artificially low prices, which did not yet reflect the undisclosed material information of Musk’s beneficial ownership of more than five percent of Twitter common stock and investment purpose.”
The SEC claimed that the disclosure delay saved Musk over $150 million, deprived other investors of potential financial gains, and caused economic harm to those who sold their shares during that window.
Notably, the Gary Gensler-led Commission pointed out that Twitter’s stock value jumped 27% after Musk finally revealed his stake, raising his holdings’ worth to $2.89 billion.
The SEC asserts that these actions breached the Securities Exchange Act of 1934, which mandates timely disclosures to prevent unfair advantages and protect market integrity.
The Commission has requested the court to impose a civil penalty and compel Musk to return the profits allegedly gained through the delayed disclosure.
Musk slams SEC
On Jan. 15, Musk publicly dismissed the lawsuit in a post on X, calling the SEC an ineffective organization that prioritizes trivial matters over addressing serious financial crimes.
According to him:
“[The SEC is a] totally broken organization. They spend their time on sh*t like this when there are so many actual crimes that go unpunished.”
Some industry experts have also questioned the SEC’s priorities in this case.
John Reed Stark, a former official in the SEC’s Internet Enforcement division, described the investigation as a potential waste of resources. He suggested that Musk’s lawyers could argue that his initial intentions were to secure a board seat rather than pursue a complete acquisition of Twitter.
Stark added:
“This case seems almost as absurd as the SEC 2008 case against Mark Cuban, and a transparent attempt by Chair Gensler to garner some last minute headlines days before his exit and to also stick it to President Trump.”
The post Elon Musk slams SEC as ‘broken’ over ‘artificially’ created $150 million Twitter stock windfall appeared first on CryptoSlate.
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Elon Musk slams SEC as ‘broken’ over ‘artificially’ created $150 million Twitter stock windfall
Share:
Elon Musk, the billionaire entrepreneur and CEO of Tesla, has criticized the US Securities and Exchange Commission (SEC) over its lawsuit regarding his delayed disclosure of a significant stake in Twitter, now rebranded as X.
The lawsuit marks a culmination of the SEC’s scrutiny of Musk’s investment activities with the social media platform in 2022.
SEC claims
On Jan. 14, Musk failed to meet the legal requirement to disclose his acquisition of more than 5% of Twitter’s shares within the mandated 10-day period.
The financial regulator pointed out that Musk surpassed the 5% threshold by March 14, 2022, but he delayed filing his disclosure until April 4—11 days past the deadline.
According to the filing:
“Because Musk failed to timely disclose his beneficial ownership, he was able to make these purchases from the unsuspecting public at artificially low prices, which did not yet reflect the undisclosed material information of Musk’s beneficial ownership of more than five percent of Twitter common stock and investment purpose.”
The SEC claimed that the disclosure delay saved Musk over $150 million, deprived other investors of potential financial gains, and caused economic harm to those who sold their shares during that window.
Notably, the Gary Gensler-led Commission pointed out that Twitter’s stock value jumped 27% after Musk finally revealed his stake, raising his holdings’ worth to $2.89 billion.
The SEC asserts that these actions breached the Securities Exchange Act of 1934, which mandates timely disclosures to prevent unfair advantages and protect market integrity.
The Commission has requested the court to impose a civil penalty and compel Musk to return the profits allegedly gained through the delayed disclosure.
Musk slams SEC
On Jan. 15, Musk publicly dismissed the lawsuit in a post on X, calling the SEC an ineffective organization that prioritizes trivial matters over addressing serious financial crimes.
According to him:
“[The SEC is a] totally broken organization. They spend their time on sh*t like this when there are so many actual crimes that go unpunished.”
Some industry experts have also questioned the SEC’s priorities in this case.
John Reed Stark, a former official in the SEC’s Internet Enforcement division, described the investigation as a potential waste of resources. He suggested that Musk’s lawyers could argue that his initial intentions were to secure a board seat rather than pursue a complete acquisition of Twitter.
Stark added:
“This case seems almost as absurd as the SEC 2008 case against Mark Cuban, and a transparent attempt by Chair Gensler to garner some last minute headlines days before his exit and to also stick it to President Trump.”
The post Elon Musk slams SEC as ‘broken’ over ‘artificially’ created $150 million Twitter stock windfall appeared first on CryptoSlate.
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